Bank Profitability and Monetary Policy Transmission in Cameroon

Marcel Takoulac Kamta (), Willi Verlaine Dongho Wamba Tejio (), Dinah Gembom Phungeh () and Gautier Tchoffo Tameko ()
Additional contact information
Marcel Takoulac Kamta: University of Bamenda, HICM, Cameroon
Willi Verlaine Dongho Wamba Tejio: University of Bamenda, HICM, Cameroon
Dinah Gembom Phungeh: University of Bamenda, HICM, Cameroon
Gautier Tchoffo Tameko: University of Dschang, FSEG, Dschang, Cameroon

Economic Research Guardian, 2023, vol. 13, issue 2, 72-81

Abstract: This study aims to evaluate the effect of bank profitability on the monetary policy transmission of the Bank of Central African States (BEAC). In order to accomplish this, we conducted a panel data analysis using a sample of 12 commercial banks that were active in Cameroon over the period 2010-2021. The Credit National Council of Cameroon provided the data used in this study. The Fully Modify Ordinary Least Square (FMOLS) and Dynamic Ordinary Least Square (DOLS) methods are used to estimate our model. We find that the most profitable banks are less sensitive to the restrictive monetary policy shocks than those with low profitability. This result shows that bank’s profitability negatively affect the effectiveness of monetary policy. Consequently, we advise BEAC to promote the entry of new commercial banks into the Cameroon financial sector. This will lead to a decline in bank profitability while also raising bank sensitivity to change in monetary policy.

Keywords: Bank profitability; Credit channel; Monetary policy; Dynamic panels; DOLS (search for similar items in EconPapers)
JEL-codes: E50 E52 E58 G21 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ecrg.ro/files/p2023.13(2)67y2.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wei:journl:v:13:y:2023:i:2:p:72-81

Access Statistics for this article

Economic Research Guardian is currently edited by Mihai Mutascu

More articles in Economic Research Guardian from Mutascu Publishing
Bibliographic data for series maintained by Mihai Mutascu ().